Financial Poise

Sharpe Ratio

  • May 24, 2023
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Created in 1966 by American economist William Sharpe, the Sharpe Ratio is a financial measure of risk-adjusted return on an investment. It compares the performance of one investment or portfolio to that of a “risk-free” investment (often bonds) and divides the difference by the standard deviation of the portfolio’s excess returns.

 



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